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GDP growth to touch 4.5 pc mark by June: Shaukat

ZAHID A BAIG

LAHORE: Federal Finance Minister Shaukat Aziz has expressed the hope that the national GDP growth rate will touch the 4 to 4.5 percent mark by June 30.

Addressing a press conference at the Institute of Overseas Pakistanis here on Monday, he stated that the government had introduced policies aimed at achieving sustainable growth and improvement in the economy. He said that these policies had shown some positive trends, such as improved performance of the stock market and the textile sector.

Shaukat said that tax collection had registered 20 percent increase during the first half of the current financial year while exports had shown 8 to 9 percent increase during this period. He claimed that foreign investment was coming to the stock market though at a slow pace. He said that the economic revival plan of the government, when implemented fully, would boost the confidence of the investors in Pakistan.

The finance minister said he hoped that the agriculture sector of the country would also support government efforts to improve the national economy. He said that according to the initial estimates, wheat crop was looking good and the government had also fixed its support price at an optimium level.

He said that the government had full realisation that the small growers had faced pressure in the sector of cotton crop. The next cotton policy, he added, would be announced before the start of the sowing season. The recent cotton crisis, he observed, occurred due to non-existence of Cotton Export Corporation (CEC). He said that was why the government directed the Trading Corporation of Pakistan (TCP) to go for its purchase. He said that the TCP hired people for this and the government provided them financing. This, he claimed, improved the prices of cotton, and expressed the view that the trend would continue next year, too.

The finance minister claimed that industrial production had also increased by 9 percent while bank lending had registered improvement. He said that Pakistan had become 'current' with payment of bills, both in terms of reschedulable and unreschedulable loans.

He said that the 'corporate and industrial restructuring corporation (CIRC) Ordinance' was in the pipeline, and the 'Corporation' would start functioning legally after promulgation of the ordinance. He said that the headquarters of this 'Corporation' would be located in Lahore, with Tariq Hameed as its chief.

About 'micro-credit bank', he said interviews to select its president were going on and it is hoped that an ordinance related to it would also be promulgated by March this year and it might start lending before next June.

The minister said that the banks would be asked by the government to extend loans to not only big projects but also to small and medium enterprises. He said that the Small Business Finance Corporation (SBFC) would be asked to play a role in this regard, and its new chairman would soon take over.

He said that Smeda would also play a role in this regard, especially in the fields like fisheries, transport, gems and jewellery.

SOFTWARE

He said that as per priority of the present government software and information technology ministry's head would be announced in a week or so, and the government would also extend concessional facilities to encourage export of software. In this regard he cited the example of PTCL's reduction in its data charges by 25 percent.

Shaukat said that the main thrust of the government was on poverty reduction and self-reliance, and towards that end the Chief Executive had already announced schemes worth Rs 15 billion that were in the finalisation stage. He said that disbursement in this regard would be ensured at provincial and district levels.

The minister said that the present government had not increased utility charges. He said that GST on electricity bills was not imposed on bills of individuals. Regarding petrol prices, he said that the government had already decided to review these on quarterly basis and if OPEC prices fall in the future, the benefit would be passed on to consumers also.

He said that kitchen item prices remained stable during Ramazan, except the prices of eggs and chicken.

Regarding campaign against defaulters, he said that NAB was continuously working. He said that the government recovered Rs 11 billion in cash while non-cash recovery was other beside it. He said these figures were four weeks old, and as recovery was under process he would have latest figures in a meeting with the State Bank officials at Karachi on Tuesday.

He said that the NAB was moving step by step, and the government did not want to nab a large number of people at one go and to see them later come out from the court. He said that the government wanted to work according to the law, and he categorically made it clear that it would not symapthise with any wilful defaulter or tax evader.

Talking about taxes, he said that the policy of the government was to broaden the tax net but reducing the tax rate. He said that unless the tax net is broadened, the country would not come out of the debt trap. He said that the government was planning to reduce the number of taxes only to three. However, there was no decision yet to waive the wealth tax after July 1.

Regarding the visit of an IMF team, he said that the four-member fiscal team of the IMF had recently left Islamabad after reviewing figures of the last budget (1998-99) while another mission was expected to come before March 31. He said that since May last year, the government had not taken a single penny from the IMF; rather, it had returned the money to it.

About the privatisation policy, he said that a proposal with short, medium and long term planning would be submitted to him by February 15 by the head of the Privatisation Commission, Saleem Altaf. Later, it would be put before the Cabinet and the Chief Executive for approval. He said that as per short term, the government would prefer to privatise the closed units as well as some assets of OGDC. He said that some public listed government companies would be privatised through the stock market to ensure participation of the public. He said that privatisation of PTCL was in transit and report of its consultants was awaited.